EURUSD range-in-range effectGood morning,
today i checked out the four-hour-chart and saw that range-in-range effect which we can see many time while the market is running sideways. This effect always has a big range, a small range in between that big range and a neutral area. Those three levels are mostly decisive for the next movement.
What does it mean in this case?
The market is currently in that neutral area. At this level i am not doing any trades since it is completely open whether it goes long or short. Thats why i am just spectating the market and wait for the moment when the market is leaving this area. If it leaves the area long i will focus at long trades only if it leaves short i will focus on short trades only of course.
Whats the sense of it?
The neutral area is mostly in the middle of the big and the small range. We know that we have a Ping-Pong-Game inside a range. So if the market is leaving this neutral area long/short it will mostly test the upper or lower range line.
For example : if the market leaves the neutral area to the long side I could plan long trades with a target the range line from the small range.
The small range lines will decide if the market entries the upper range or the lower range area. Thats why you can see that small range also as a "neutral area" regarding the big range if you only want to focus on trade with big range targets.
Summary : i will wait for a break out of the neutral area to find possible long/short entries.
